Options Trading News

Traders want to generate some profits with electricity producer Calpine.

optionMONSTER's Heat Seeker program detected the purchase of some 1,600 June 21 calls for $0.55 to $0.70. Volume was more than 10 times previous open interest at the strike, indicating that new positions were initiated.

These long calls lock in the price where shares can be purchased, letting investors cheaply position for a rally before the end of the week. The contracts can also generate significant leverage, doubling or tripling from even a small gain in the underlying stock. (See our Education section)

CPN rose 1.97 percent to $21.73 on Friday and has been slowly trending higher since the market bottomed more than four years ago. It began the month around $19.50, rallied above its 50-day moving average, consolidated, and is now continuing to the upside.

Total option volume was 7 times greater than average in the session, with calls outnumbering puts by a bullish 21-to-1 ratio.

optionMONSTER® provides stock market insight, advanced options education, and actionable trade ideas to meet the needs of do-it-yourself investors. After spending decades in the trading pits of Chicago, Jon 'DRJ' and Pete Najarian founded the company in 2005 to help people better manage their own investment portfolios.